Press Release|Insurance

KBRA Affirms Rating for Trusted Fraternal Life

26 Nov 2025   |   New York

Contacts

KBRA affirms the A insurance financial strength rating for Trusted Fraternal Life ("TFL" or "the Society"). The Outlook is Stable.

Key Credit Considerations

The rating reflects TFL’s strong capital adequacy, stable profitability, and disciplined operating and financial management. The Society maintains a robust balance sheet, with its company action level risk-based capital (CAL RBC) ratio consistently above 500%, supported by solid earnings retention, conservative investment practices, and the absence of financial leverage. Capital formation has been driven by consistent operating profitability and merger-related scale efficiencies, while TFL continues to demonstrate strong liquidity and prudent asset-liability management. The investment portfolio remains high quality, with approximately 99% of bonds rated investment grade and limited exposure to higher-risk assets.

Profitability remains sound, underpinned by a balanced mix of life and annuity reserves and favorable spread management. Net gain from operations improved to $14.1 million in 2024, supported by higher investment yields, disciplined expense control, and merger synergies. Lapse rates remain low, reflecting strong persistency and effective member retention practices. TFL’s Enterprise Risk Management framework and governance processes are well developed, supporting risk identification, capital planning, and strategic decision-making across the organization.

Balancing these credit strengths are execution risks associated with ongoing system modernization and merger integration, exposure to disintermediation risk in the annuity block, and competitive pressures within the fraternal and broader life insurance markets. Organic membership growth remains limited, consistent with industry trends, though the Society’s Family of Brands strategy and expanded independent distribution channel have helped sustain overall growth and market relevance.

Rating Sensitivities

Factors that could positively impact the rating include sustained growth in earnings and surplus supported by stable spreads and disciplined expense control, continued strengthening of capitalization with an RBC ratio maintained well above target levels, effective execution of merger and modernization initiatives, and demonstrated operating efficiency and diversification.

Factors that could negatively impact the rating include a material weakening in asset quality or capitalization, a sustained decline in earnings from spread compression or higher expenses, operational or execution challenges tied to integration or system modernization, increased disintermediation activity affecting spreads and liquidity, or failure to maintain governance and risk management standards appropriate for the company’s expanded scale.

To access ratings and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1012454